Correlation Between SVENSKA CELLULO and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both SVENSKA CELLULO and Playtech Plc at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SVENSKA CELLULO and Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVENSKA CELLULO B and Playtech plc, you can compare the effects of market volatilities on SVENSKA CELLULO and Playtech Plc and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SVENSKA CELLULO with a short position of Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVENSKA CELLULO and Playtech Plc.
Diversification Opportunities for SVENSKA CELLULO and Playtech Plc
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SVENSKA and Playtech is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SVENSKA CELLULO B and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech plc and SVENSKA CELLULO is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SVENSKA CELLULO B are associated (or correlated) with Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech plc has no effect on the direction of SVENSKA CELLULO i.e., SVENSKA CELLULO and Playtech Plc go up and down completely randomly.
Pair Corralation between SVENSKA CELLULO and Playtech Plc
Assuming the 90 days trading horizon SVENSKA CELLULO B is expected to generate 1.17 times more return on investment than Playtech Plc. However, SVENSKA CELLULO is 1.17 times more volatile than Playtech plc. It trades about 0.07 of its potential returns per unit of risk. Playtech plc is currently generating about 0.02 per unit of risk. If you would invest 1,291 in SVENSKA CELLULO B on November 29, 2024 and sell it today you would earn a total of 25.00 from holding SVENSKA CELLULO B or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SVENSKA CELLULO B vs. Playtech plc
Performance |
| Timeline |
| SVENSKA CELLULO B |
| Playtech plc |
SVENSKA CELLULO and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SVENSKA CELLULO and Playtech Plc
The main advantage of trading using opposite SVENSKA CELLULO and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVENSKA CELLULO position performs unexpectedly, Playtech Plc can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Playtech Plc will offset losses from the drop in Playtech Plc's long position.| SVENSKA CELLULO vs. Sekisui Chemical Co | SVENSKA CELLULO vs. SAN MIGUEL BREWERY | SVENSKA CELLULO vs. National Beverage Corp | SVENSKA CELLULO vs. SILICON LABORATOR |
| Playtech Plc vs. MAVEN WIRELESS SWEDEN | Playtech Plc vs. Singapore Telecommunications Limited | Playtech Plc vs. Gruppo Mutuionline SpA | Playtech Plc vs. CODERE ONLINE LUX |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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